SHARE
Image courtesy of Diamond Offshore Drilling.

Rig contractor Diamond Offshore Drilling scrapped its special dividend Tuesday as it braces for a significant number of its ultra-deepwater rigs to be idled amid low oil prices.

The Houston-based company has been paying a special dividend since 2006.

The company will likely use the cash to take advantage of opportunities in distressed markets, Reuters said.

Scrapping the dividend is expected to save the company about $415 million over the next year, a note from Evercore ISI said.

Diamond did not disclose how long the special dividend payment will be shelved.

The company saw revenues fall 7 percent to $675.3 million in the fourth quarter as utilization rates for its ultra-deepwater and mid-water floater rigs slid.

Utilization rates for the company’s ultra-deepwater rigs fell to 66 percent from 80 percent during the same period in 2013.

Diamond has cold stacked three of mid-water semisubmersible drilling rigs, the Ocean General, Ocean Saratoga, and Ocean Vanguard, since the end of December.

The company booked a revenue of $674.37 million during the fourth quarter, down from $707.97 million during the fourth quarter 2013.

Diamond’s earnings beat analyst expectations at $0.72 per share.

The company currently has 13 ultra-deepwater rigs, seven deepwater rigs, 12 midwater rigs and seven jack-up rigs in its fleet.